There are many life events that can cause a family to move from a two-income earning household to only one. Some of the life events that can cause families to be forced to live on only one income are: a bad accident that hinders a person’s ability to work, health challenges, caring for an aging parent, welcoming a new child, or a myriad of other events. Although it’s not impossible to survive while living on only one income, some families don’t merely want to survive, they would rather thrive. Here are some tips that may help you and your family thrive while living on only one income.
The key to thriving on only one income is to plan. Start looking at what you are spending your money on. Look at any services that you can cancel or live without. Some services that are optional are as follows:
- cable (watch your favorite shows on the internet or through a cheaper subscription service. Another option is to buy modems so you won’t need to rent them monthly.)
- eating out (make your own food)
- car satellite radio subscriptions (plug-in your iTunes or music on your phone)
- premium and unlimited cell phone packages (downgrade to a basic plan that’s cheaper or switch carriers)
- Gym memberships (exercise outside or at home)
- Bottled water (buy water filters and reusable bottles)
- Leasing a vehicle (buy a cheap used vehicle)
- Book/CD/DVD subscription services (Use free library services like Overdrive)
- Use major home appliances before 10 am and after 7 pm.
- Shop around for the best rates for insurance (car, home, rental, etc)
Also pay down debts as much as possible. Before we became a one income household. I was able to pay off all of my student loan debt. Here are the tips I used to pay off our student loan debt: Tips to Get Rid of Student Loans.
Before you quit your job, I highly recommend that you start living on one income first. At least for a year before you need to. During the year, use your earnings to save and pay down all debts with the money you make. Thus, when the time comes, you will already have a good concept of how to discipline yourself. Also, find creative ways to save. If you’re looking for some creative ideas, I discussed several in Finance Friday Live Episode 1 – Winter Savings
Banks like Capital One 360 give you an opportunity to have a free checking and savings account. I recommend their account because it doesn’t have any hidden fees and you can deposit checks from your mobile device. I also like that they will allow you to see your credit score and report for free if you use their services.
It may be tempting to sign up for the work from home jobs that you see in your local newspaper or online, but please be very cautious and avoid pyramid schemes, phishing scams, and others. More specifically AVOID:
- Stuffing envelope jobs – these places are emailing telemarketing scams that cause you to pay upfront, only to resell the same job description you were initially sold to other unsuspecting job seekers.
- Medical Billing – Healthcare offices can easily hire qualified professionals. There is not a shortage of hospital billing staff, this just simply isn’t true and is another example of a telemarketing scam.
- General assembly jobs – especially if they want you to put down a large sum of money first.
Generally, if something looks too good to be true, then nine times out of ten, it probably is. Don’t invest your own money into any of these scams unless you know and are 100% sure that you will at least see a return on your investment.
When thinking of what changes you can sacrifice, there are a few things you should take into consideration such as healthcare costs, in which case, if the working spouse/partner can get decent health care through his or her employer, then sign up. Also signing up for a pre-taxed flexible spending card is a good idea if you and your family members need medicine or medical care regularly. If the one wage earner does not have a good health care plan, strongly consider paying for COBRA after you leave your job. Before leaving talk to your employer’s HR rep and find out the limitations that are enforced.
Lastly, if limited your household income to one wage earner causes you to lose sleep, please consider getting a part-time job that offers more flexibility. The easiest option would be to provide a service to your community that people would be willing to pay you for your expertise.
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